FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
## Required Information **[The following information applies to the questions displayed below]** Grant Enterprises and Lee Corporation report the following amounts for the year: | | Grant | Lee | |---------------------------|--------|--------| | Inventory (beginning) | $34,000| $55,000| | Inventory (ending) | $38,000| $65,000| | Purchases | $315,000| $285,000| | Purchase returns | $21,000| $16,000| ## Required: 1. Calculate the cost of goods sold for each company. ### Table (for Calculation) | | Grant | Lee | |---------------------------|-------|-------| | Beginning inventory | | | | | | | | Cost of goods available for sale | | | | Cost of goods sold | | | This table allows for the calculation of the cost of goods sold by incorporating the beginning inventory, purchases, purchase returns, and ending inventory. It helps to determine the total amount available for sale and the actual cost of goods sold during the year.
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Transcribed Image Text:## Required Information **[The following information applies to the questions displayed below]** Grant Enterprises and Lee Corporation report the following amounts for the year: | | Grant | Lee | |---------------------------|--------|--------| | Inventory (beginning) | $34,000| $55,000| | Inventory (ending) | $38,000| $65,000| | Purchases | $315,000| $285,000| | Purchase returns | $21,000| $16,000| ## Required: 1. Calculate the cost of goods sold for each company. ### Table (for Calculation) | | Grant | Lee | |---------------------------|-------|-------| | Beginning inventory | | | | | | | | Cost of goods available for sale | | | | Cost of goods sold | | | This table allows for the calculation of the cost of goods sold by incorporating the beginning inventory, purchases, purchase returns, and ending inventory. It helps to determine the total amount available for sale and the actual cost of goods sold during the year.
Expert Solution
Check Mark
Calculation of net purchases

Net purchases = Purchases - Purchase returns

  Grant Lee
Purchases $355,200 $185,800
Purchase returns $21,000 $66,000
Substitute the values in the formula.
Net purchases $355,200 - $21,000 = $334,200 $185,800 - $66,000 = $119,800

 

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